Please note that the photo above isn’t directly related to the story below, but is only meant to show some of the Astoria & Queens housing stock.
I was approached in reference to selling someone’s parents’ home.
They informed me that it was a 2 family brick, semi-attached on a block close to the subway and wanted to know what my opinion of the value was.
I mentioned that for a more accurate assessment, I would need to take a quick look at the property to see its condition and then compare it to similar properties that were recently sold.
Before doing that I looked up the house on various websites that I subscribe to, and obtained information about the house size, property zoning, any possible violations, current real estate taxes etc.
Upon further investigation, I noticed the tax class for the property (B3- a 2 family converted from a 1 family). From prior experience I have learned that the tax class and the certificate of occupancy (C of O) , the document that states what your property is, do not always coincide.
After inspecting the property , I noticed that there were 2 electric meters and 1 gas meter. I contacted a company that does certificate of occupancy searches and after further investigation, the house came back as a 1 family, not a 2 family.
THE CHALLENGES THAT WOULD HAVE BEEN CREATED BY NOT DISCOVERING THIS INFORMATION
- The appraised value of a 1 family and 2 family can differ.
- The buyers’ thought they were buying a 2 family and then would have found they were getting a 1 family.
- The method that a buyer qualifies for either property differs. On a legal 2 family, a portion of the rental income can be used to help the buyer qualify for a higher loan amount.
- The title search ( a search performed by a title company to check certificate of occupancy, any violations, etc). would have revealed that the house was a 1 family but this comes 2 to 3 months from going to contract.
Inevitably, if I hadn’t done the prior research, and wasn’t familiar with the zoning / legal / financial technicalities, discovering and identifying these obstacles at the beginning, the transaction could have easily fallen apart, and the house would have had to be placed back on the market, and the whole sales process started all over again.
Putting a property back on the market can impact its price.